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February 2018

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The handicraft industry of the country has requested the government to continue tax concessions further for a period of three years so as to ease the effects of the global economic slump.

The Export Promotion Council for Handicrafts (EPCH), in its pre-budget proposal for the financial year 2011-12, suggested continuance of the tax exemption benefit under Section 10BA of the Income Tax Act, so as to help the survival and growth of the handicrafts sector, and to make it possible for the sector to attain the export target.

Underlining the recent move of the government of slashing the duty drawback rates on key handicraft products, EPCH demanded that the government should put back the higher rates that existed prior to the release of the new schedule. The Council claimed that, the government should do this in consideration of the adversities the exporters are confronting.

Further, the EPCH has also placed forth the demand of the handicraft exporters seeking exemption from the service tax that they need to pay while participating in the international trade fairs.

The Council members are required to pay service tax on the participation fee that they pay to the Council in terms of Indian rupees. But if the exporters directly book space in these international shows, no such service tax is charged. Also to note that, no such service tax is charged when the participants pay charges in foreign currencies like in US dollar, GBP, Euro, etc.

Such service tax imposition lays an extra burden on the exporters, thus making it tough for the Council to draw more participants, the EPCH claimed.

The Council even demanded that the sector should be permitted to import the trimmings and embellishments which are though not include in the list of items specified under the amended S. No. 114 of Custom Notification No. 21/2002 issued on 01.03.2002, but are actually required by the exporters.

Some items need to be added to the existing list of items which are granted the benefit, the Council claimed.